Question

Black Media Inc. owns and operates a large number of news-papers across Canada. On 1 October 20X5, the board of directors voted unanimously to dispose of one of those newspapers, The Daily Con. Black Media would continue to publish The Daily Con while a buyer was being sought. As Black Media was facing some financial problems, the Board hoped for a quick sale. The newspaper was Black Media’s sole holding in that city, and thus the newspaper’s assets and liabilities could easily be transferred to a new owner. The Board authorized an immediate search for possible buyers, and the com-pany received several indications of interest by the end of 20X5. The net assets of The Daily Con can be summarized as follows:

Required: 1. Does the potential sale of The Daily Con qualify for treatment as a disposal group? Explain. 2. Give the appropriate entry or entries pertaining to The Daily Con on 1 October 20X5. 3. Assume that there is no change in recoverable amounts between 1 October and 31 December 20X5. Show how the year- end 20X5 SFP and SCI will be affected by the decision to sell The DailyCon.